Posted by: Kevin | May 31, 2007

This is Free Market Economics?

So the Bush Administration is all about the Free Market.  Issues like outsourcing, illegal immigration and prescription drug care among others are always seen through the lens of the Free Market Economy. 

John W. Snow, the Treasury secretary, said in an interview with The Cincinnati Enquirer that the practice of moving American jobs to low-cost countries “is part of trade” and that “there can’t be any doubt about the fact that trade makes the economy stronger.”
March 30th 2004 New York Times (emphasis mine)

In an interview, Michael O. Leavitt, the secretary of health and human services, said he saw no prospect of compromise on the issue.
“In politics,” Mr. Leavitt said, “most specific issues like this are a disguise for a larger difference. Government negotiation of drug prices does not work unless you have a program completely run by the government. Democrats say they want the government to negotiate prices. What they really want is government-run health care.”
Secretary Leavitt said he did not want the power to negotiate drug prices. “I don’t believe I can do a better job than an efficient market,” he said.
Nov 13th 2006 New York Times

I could go on, but I think I’ve made my point.  Bush loves the free market and that’s not necessarily a bad thing in all cases.  So how then, do we explain this

The Bush administration said Tuesday it will fight to keep meatpackers from testing all their animals for mad cow disease.
The Agriculture Department tests fewer than 1 percent of slaughtered cows for the disease, which can be fatal to humans who eat tainted beef. A beef producer in the western state of Kansas, Creekstone Farms Premium Beef, wants to test all of its cows.

This is a classic example of the free market accomplishing something good.  Sales of beef products have been hurt by concerns about mad cow disease.  So one producer decides he can get a competitive advantage by testing all of his cows.  Then he can confidently tell consumers that his product is 100% safe.  Market competition would eventually force more producers to start testing and we all get to eat steak again.  So why stop it?

The Agriculture Department regulates the test and argued that widespread testing could lead to a false positive that would harm the meat industry.

This doesn’t pass the smell test though.  This producer is using the government test which is already used on roughly 1% of cattle in the US.  Meaning the risk of a false positive is already there.  Also, a false positive would hurt this producer’s business much more than it would hurt the industry as a whole, as the taint of mad cow disease is already present on US beef producers.  I hate to resort to a cheap pun but this looks and smells like bull shit.

Hat Tip to Donklephant


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